Thursday, August 8, 2013

Don't Keep the Change

So this doesn't actually save or make you any money, it just makes you FEEL like you have more money. It will make sense at the end.

USE YOUR LOOSE CHANGE WHENEVER POSSIBLE! Don't put it in your pocket or car and forget about it, don't save it in a jar and cash it in months later. USE IT!
I'll explain in two ways.

1. Because of the depreciation of money, the penny will be worth significantly less in a month from now than a dollar, comparatively. So it just makes more sense economically. Look at it this way, if you saved all your coins your whole life to see how much you would get all those years later, it would be significantly less than if you had spent those coins when they could buy you more. Eighty years ago, you could buy a lot with just coins.

Not to mention the fact that a lot of those places where you dump coins in to get cash charge you a fee and if you turn it into a bank it has to be in rolls which require exact amounts.

2. But for some of you, that's not enough of an incentive. Here's another reason to use your change. Let's say you have a purchase of $2.34. You have two dollar bills, a five dollar bill, and several coins (enough to cover 34 cents). You can pay two ways, 1.) You can just use the $5 bill or 2.) You can use the two $1 bills and your change.

Now before I explain why you want to do the latter, let me say that most people look at how much money they have only by counting the bills. I mean it makes sense, you don't want to spend the time counting change when it's probably a dollar or less.

With that in your minds, in example 1.) you would get 2 one dollar bills back along with more change. That leaves you with four one dollar bills. In example 2.) you paid in exact change so you wouldn't get anything back. But you are left with your five dollar bill. When you just see how much money you have in bills, you have one more dollar.

Now do you really have an extra dollar? No. But it FEELS like you have an extra dollar because we only look at bills. Of course, a dollar isn't much but when you are dealing with larger bills, it can add up.